“The Chinese beauty market is the most open in the world,” declared Joël Palix, CEO of the Feelunique e-commerce platform at China Connect, a key event for experts in Chinese digital marketing held in March in Paris. As he evoked research firm L2, he emphasized the fact that among the ten highest-performing online beauty brands there, four are French (Avène, Dior, Lancôme, L’Oréal Paris), two American (Estée Lauder, Maybelline), two Korean (Innisfree, LANEIGE), one Japanese (SK-II), and only one is Chinese (CHANDO).
“Feelunique achieves a turnover of more than 100 million pounds, mainly online, by offering 550 cosmetics brands to distribute their products all around the world overnight,” the CEO explains. Based on a cross-border e-commerce model, the British platform founded in 2004 only settled in China in October 2015. Then, they contacted Azoya, a Shenzhen-based company, which developed the Chinese version of the Feelunique website and manages merchandising, marketing, and customer service on the local level. “Right now, we are distributing 350 brands and 20% of our global sales are made in China,” explains Joël Palix.
|Joël Palix, CEO Feelunique|
Suspicious local platforms
To him, this success is due to the fact that Chinese people shop a lot online (the beauty market in China represents 12% of global sales, but 30% of online sales on the global level), and are extremely well-informed. “Chinese consumers spend hours trying to get information on brands that are not available in China on platforms specifically created to this end, like Xiaohongshu (Little Red Book). That is why the cross-border model is real relevant.”
Local e-commerce is only a limited part of the market, “because Chinese people do not trust local platforms, which can sell potentially harmful counterfeits when it comes to cosmetics. So, they prefer to turn to Western websites,” says Joël Palix. The latter also offer less expensive products, because there are fewer taxes: Chinese buyers are sensitive to this advantage.
Preventing animal testing
For foreign brands, the cross-border model is a means to penetrate the Chinese market faster, “otherwise it takes 6 to 18 months to register products on the local level,” Joël Palix warns. “Then, the products need to be approved by Chinese authorities, who impose animal testing, and many brands consider it unethical.” The cross-border model is absolutely legal in China. As a result, companies can get rid of burdensome constraints and test the market without much investment.
All this does not mean you will be successful, no matter what, since the key for brands is to attract people’s attention and create a community, whether online or in real life. “Today, Chinese consumers want more than a product, they want to interact with the brand and feel like they belong to a community, a specific lifestyle,” Joël Palix reiterates. “The platform you use is actually less important than the quality of your content and how you adapt to the Chinese calendar, how you build up your relationship with consumers, even outside China, through KOLs (Key Opinion Leaders) or the Chinese diaspora abroad – they can spread the word to their families and friends in China.”
A changing landscape
Right now, WeChat remains the essential platform if you want to reach the Chinese public. “It is our main driver today. It is crucial to develop a strategy specific to WeChat, with an exclusively Chinese content,” emphasizes Joël Palix, explaining that Feelunique is not present on major platforms like Tmall and JD.com. “That made people rather sceptical when we launched our brand in China.”
“However, we are now open to other platforms, including Xiaohongshu (Little Red Book), and we do everything to make sure our model is the right one in this fast-changing Chinese environment.” To Joël Palix, Feelunique has gained efficacy in terms of global functioning since the company entered China, because “this country leads the way in the field of online beauty sales.”